BJ’s Wholesale Club maintains momentum; offers stronger-than-expected outlook

3/9/2023

For the full year, BJ’s total revenue rose 15.9% to $19.315 billion.

BJ’s Wholesale Club is feeling confident about 2023 on the heels of strong fourth-quarter earnings and sales.

The membership warehouse club retailer also gave an update on its 2023 expansion plans, which include entering two new states: Alabama and Tennessee. BJ's will open a location in LaVergne, Tenn., this summer, which will mark its 19th state of operation. A second Tennessee location is planned for Mt. Juliet. BJ's will enter its 20th state later in the year, when it opens in Madison, Ala.

Additional 2023 openings include Johnson City, N.Y., Lewis Center, Ohio; and North Jacksonville, Fla. (In February, BJ's opened in Davenport, Fla., and McDonough, Ga.)

Net income totaled $129.8 million, or $0.95 a share, for the quarter ended Jan. 28, up from $107.6 million, or $0.78 a share, in the year-ago period. Adjusted earnings came to $1.00 per share, topping analysts’ estimates of $0.88 per share.

Net sales rose 13.2% to $4.828 billion from $4.264 billion, ahead of the $4.786 the Street expected. (Total revenue was $4.929 billion, up from $4.357 billion last year.)

Same-store sales rose 9.8%, also more than expected. Excluding the impact of gasoline sales, comparable sales increased by 8.7%

Membership fee income rose 8% to $101.8 million. The retailer’s tenured member renewal rate reached an all-time high of 90%. Digital sales grew 22%.

For the full year, BJ’s net sales rose 16% to $18.918 billion. Total revenue rose 15.9% to $19.315 billion.

“2022 was a record year, having surpassed $1 billion in adjusted EBITDA for the first time in the company’s history,” said Bob Eddy, president and CEO, BJ’s Wholesale Club. Our continued focus on value has driven traffic and market share gains all year. Our digital business is growing and we’re successfully expanding our footprint.”

BJ’s opened five new locations since the end of its third quarter. The retailer has announced several upcoming locations, including its first-ever club in the state of Tennessee. It is also launching a new credit card program with Capital One and Mastercard.

The company launched its co-brand credit card program with Capital One in February 2023.

For fiscal 2023, BJ’s expects comparable club sales, excluding the impact of gasoline sales, to increase 4% to 5% year-over-year and membership fee income to increase 5% to 6% year-over-year. Earnings per share are expected to remain approximately flat year-over-year, including the 53rd-week benefit of low-teens cents per share. Analysts were expecting fiscal 2023 earnings to be down 2.5%.

“We remain confident that our advantaged business model, continued focus on executing our strategic priorities, and commitment to delivering great value to our members will continue to drive strong results for our business,” said Laura Felice, executive VP and CFO. “We look ahead to fiscal 2023 with the understanding that there is still significant uncertainty in the macroeconomic backdrop as well as its influence on the U.S. consumer.”

As part of its Investor Day, the company also provided its long-term financial targets for annual growth, on average:

Comparable club sales growth of low-to-mid single-digit percent, excluding the impact of gasoline sales;
Total revenue growth of mid-single digit percent; and
Earnings per share growth of high-single to low-double digit percent.

“As we reflect on the past five years, we have transformed our company, delivering significant growth across virtually every aspect of our business,” said Eddy. “Looking ahead, we are excited to continue this momentum, which is powered by a world-class team and a culture of operational excellence. We are laser-focused on improving member loyalty, driving an unbeatable member experience, delivering value conveniently through our digital offerings, and expanding our footprint. Furthermore, we remain committed to maximizing shareholder value through prudent capital allocation.”

Headquartered in Marlborough, Mass., BJ's Wholesale Club Holdings currently operates 237 clubs and 165 BJ's Gas locations in 18 states.

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